CS9-004
Current State and Future Considerations about Technology Transfer through Technical
Advisory Services in Korea
Naohiro Hagihara
Obayashi Corp.
Osamu Fujiwara
Obayashi Corp.
Yoichi Shimada
Obayashi Corp.
Introduction
In rigorous economical and social circumstances in which Japanese construction industry is struggling, the so called fee
business, which provides patents and know-how possessed by company to customer, is receiving much attention as a new
form of business for the construction industry in the future. Opportunities of such overseas business for Japanese companies
are increasing. Based on technical advisory services for LNG in-ground tanks, which is executed by OBAYASHI Corp.(OC),
in Inchon, Korea as the fee business, this paper presents the current state and future considerations toward a suitable
technology transfer considering about host country’s situation and requirements.
General Description of the Project
The project consists of construction of two 200,000KL LNG in-ground
tanks at Inchon LNG receiving terminal of Korea Gas Corporation
(Owner), which is located at Inchon, about 40km west of Seoul, the
capital of Korea (see Fig.-1), with construction period 52 months from
June 1999. This LNG in-ground tank project, the first LNG tanks in
Korea, is executed by Korean contractors with Korean finance. OC
participates in the project as an advising company. Organization and
contract diagram is as shown in Fig.-2.
General Explanation of Agreement
The owner of the Project conditioned to the local contractors that the
contractor must obtain technical assistance from foreign contractors
experienced in LNG in-ground tank. To comply with such condition,
Fig.-1 Location of the project
DAEWOO E&C Co., Ltd (DWC) has requested OC to participate in the
Project, then OC and DWC have made a Technical Collaboration
Agreement (TCA) in August 1999 for design of civil portion of the LNG
KOGAS
(Owner)
Consulting
Owner’s
Consultant
in-ground tanks and related facilities, and for dispatch of engineers for
execution of field advisory services. As of April 2001 nine engineers are
- T urn Key Contract
- Design & Construction
dispatched by OC to the construction site of the Project as field advisors
to execute the services in accordance with work contents described in
TCA. TCA exempts OC from any obligation and responsibility regarding
DAEWOO/
HANYANG JV
(Contractor)
the performance of the contract between the owner and the contractor.
Technical Advisory
Services on Design
and Construciton
Work Contents of Technical Advisory Services
The work contents for field advisors described in TCA are as follows.
- To advise on the interpretation in terms of construction procedure of
OBAYASHI
Fig.-2 Organization and contract diagram
the documents prepared by OC, and on the know-how on construction matters on site
- To advise on quality control method; construction performance and method, and any other necessary for construction
- To sign on the relevant documents for issues to be confirmed as witness
Keywords: Fee business, Technology transfer
Obayashi Corp. Inchon LNG Project Office, Inchon, KOREA Tel: +82-32-819-0162
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土木学会第56回年次学術講演会（平成13年10月）
CS9-004
Issues during Execution of Services
The following substantial issues have arisen during execution of the services as field advisors. Construction of LNG inground tanks requires comprehensive concentration of advanced technology with regard to design and construction in order
to secure functions of the tank. In this project the field advisors neither manage construction work nor directly supervise the
project and they only give advices to the local contractors who are in charge of actual construction work and supervision.
During execution of the field advisory services, discrepancies about work order and work detail plan to construct the final
aimed structure have sometimes occurred between the local contractors and the field advisors, who interpret and advise in
terms of design concepts. The reason is that the local contractors’ way of thinking about quality and sequence of the
construction is sometimes different from design concepts made by OC in Japan.
Therefore the field advisors make advices in consideration of or paying attention to the following matters; 1) standpoint of
local main contractors as if they are trading firms, 2) technical level of sub-contractors working on the site, 3) basic concern
and way of thinking toward quality of the work in Korean construction industry, 4) request from the owner to keep
construction schedule and to monitor the budget, 5) adherence to specifications applied to preceding similar tanks, and
6) possibility of adoption of local products and simplification of work.
Furthermore, the field advisors should make advices taking the following fundamental issues into consideration during
execution of their services. The issues are; 1) what subjects the local contractors require, 2) how much disclosure of patents
or know-how possessed by the advising company is to be allowed, 3) how to deal with cases that seem to be beyond the
scope of agreement, 4) contents of the agreement, 5) claim for services beyond the scope of agreement, and 6) notification of
incidents which may happen in the future to the local contractors and proposals of countermeasure when an advice is not
accepted by the local contractors.
Results of Technology Transfer through Technical Advisory Services
Main purpose of this technical advisory services is to transfer highly sophisticated design know-how for construction of LNG
in-ground tanks and to guide the local contractors in complying with strict technical design requirements. However a great
concern, which has not been fully resolved since the beginning of the services, is how the field advisors should advise in
order to keep design requirements and to fulfill indispensable conditions for the functions of the tank structure against
demand of cost down and shortening construction period from the local contractors.
The field advisors are now executing services with an understanding that the below-mentioned ways of technology transfer
are likely to be suitable for the concerned country. 1) Japanese design and construction standards and specifications should
not be simply brought into the concerned country. 2) While keeping the minimum requirements on design and construction,
the standards and specifications should be modified in order to match the characteristics of the concerned country’s
construction industry which is developed with its technology transition.
In compliance with the local contractors’ demand, so far the technology transfer is under satisfactory progress through
adoption of local products and proposal of construction sequence considering technical level and specification of construction
work on the site within the range allowed in the design specifications. Consequently, not only the local contractor but also the
owner has placed reliance on OC’s technical advisory services.
Conclusion
Generally speaking, if Japanese companies transfer their patents or know-how abroad without verification of the host
country’s situations such as history of technology transition, current technical level, and range of supporting technology, the
transferred technology will be like being forced on the host country and will not really take roots in the host country. Also an
overall system ranging from raising of basic technical level to education of new technology should be established in the host
country when a new advanced technology is introduced. In other words, although there are various forms of technology
transfer, it can be regarded as a key of transfer whether the companies and their dispatched engineers can correspond flexibly
to host country’s need with accurate and prompt recognition of its demand and present situation. Therefore it is desirable for
Japanese companies and their engineers engaged in technology transfer to change some of the fundamental attitudes.
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土木学会第56回年次学術講演会（平成13年10月）